Following David Einhorn's take-down of the great and glorious Oz Larry Meyer eighteen months ago, the latter has been in training - readying his counterfactual counter-punches and controlling his ire. The king of Keynesianism just had his bell rung once again by a market realist and pragmatist as Stephen Roach destroyed the "if-we-don't-have-models-we-are-making-it-all-up" maestro and his constant diatribe of counterfactual crap. "Where's the beef, Larry?" Roach asked on CNBC this morning, which was followed up with a rabbit punch from Kiernan, "and what about Christina Romer's stimulus-employment model?" The visibly shaken (seriously watch the clip) Meyer falls back once again to a defensive pose - and while practically admitting that the Fed is impotent - as he pulls out the ultimate "but without our models we would not be able to tell you how much worse it would be without the Fed interventions". Roach takes this weak cross to the chin and comes over the top with a devastating "mark your models to market in light of what the economy has done over the four and a half years, the traction from monetary policy has been the major disappointment of this so-called post-crisis recovery." TKO.

"There is no science in what you say - that conventional or unconventional monetary policy will deliver real economic growth"

Larry Meyers: "Maybe we don't get it right. Maybe we have the wrong models. Maybe we kill a few million people. Maybe we give too much money to banksters and kleptocrats. At least we're doing economics."

You can tell Larry needs to go back to the shleter of his coddling colleagues in the ivory tower who can reassure him that everyone else are just a bunch of idiots who don't get it. Then, they must take over government so they can force their views on everyone. Wait. I guess that's already happened.

It's amazing with all the counterfactual talk, he certainly never considers the Broken Window Fallacy counterfactual.

its just amazing - the newspeak about models and counterfactuals - being 'intelligently' discussed.

a model is only necessary when statist hubris insists, that at best, a planned economy is really the form of government best suited to the human condition. have these assholes forgotten the moral degeneration of the 20th century wrought by the statists? 150 million innocent civilians killed for objecting to their 'government's' utopian nightmares?

i can just hear this asshole's response "but we can't do nothing!" - with the hidden subtext being, to protect and extend our power as the status quo. how long can these assholes pull strings from behind the curtains?

brings to mind one of my favorite quotes: "America is at that awkward stage. It's too late to work within the system, but too early to shoot the bastards." Claire Wolfe

He is an elitist buffoon. You are too obsessed with the whole Jewish/Banking/Zionist Conspiracy thing. Meyer is an over-educated sliverspoon-licking gloablist idiot that happens to be of Jewish decent, he probably isn't even a man of real Hebrew faith. Maybe you are just a bigot? (along with many other ZH-ers)

“...out from the door of the farmhouse came a long file of pigs, all walking on their hind legs...out came Napoleon himself, majestically upright, casting haughty glances from side to side, and with his dogs gambolling round him.

He carried a whip in his trotter.

There was a deadly silence. Amazed, terrified, huddling together, the animals watched the long line of pigs march slowly round the yard. It was as though the world had turned upside-down. Then there came a moment when the first shock had worn off and when, in spite of everything-in spite of their terror of the dogs, and of the habit, developed through long years, of never complaining, never criticising, no matter what happened-they might have uttered some word of protest. But just at that moment, as though at a signal, all the sheep burst out into a tremendous bleating of-

It's utterly transparent bullshit. If the observed data don't fit the model then we only need to adjust our model to accept the new data.

It is never once a consideration that perhaps the model is a piece of fuck that is completely wrong and irrelevant. We are supposed to bow to the model because it is complex and unknowable. It's a religion of it's own that these fucks use to confuse and placate the masses. Much like the bullshit that is the man-made global warmingists. Their models never predict anything but we are supposed to kowtow to their abiltiy to predict everything.

There is one ledger for those that are not connected to the cartel and that ledger includes true accounting for assets and liabilities. The cartel has one journal that has no accounting of liabilities, as those liabilities get to be assets. What a wonderful FUCKING world!

I have noticed alot more tension on CNBS lately. Yesterday that British idiot host with the plastic face was all red faced about something too. Santelli was ripping Becky Quick the other morning. It hasn't been all nicey nicey lately, and I don't even watch it all that much. Turning into reality TV!!

A CEO is interviewing three candidates for a CFO job, a mathematician, an accountant, and an economist.

The mathematician walks into the CEO's office, and is handed an excel spreadsheet. "What is the final total net profit for fiscal 2011"? asks the CEO to the mathematician. The mathematician gets out his trusty Thinkpad, and after 25 minutes, tells the CEO, "$10,986,567.54 net profit". "Thank you", says the CEO.

In comes the accountant. The CEO hands the same file to the accountant, who pulls out his Macintosh, and after 5 minutes says, "$10 million net net plus or minus 10%". Thank you says the CEO.

In comes the economist. The CEO hands him the file and asks, "What is the final total net profit for fiscal 2011"? The Economist bolts out of his chair, runs and locks the door jamming a carpet under the gap, goes to the window and closes all the blinds, unplugs the phone and computer, turns off the lights save for one dim lamp in the corner, leans into the CEO's ear and whispers..."What do you want it to be"?

but but models... that was basically the whole argument. As if the market is predictable like a scientific experiment. That's what these guys never seem to get. It's not like an organism, is far less predictable. That's why central planning will never work.

It was pretty funny stuff. Meyer can't stand the possibility that people will stop paying attention to his models because they don't work. Then what's left? Take the Fed out of the predictions business, stop intervening in the economy, and return to sound central banking. (see Bagehot)Good god, we won't be masters of the universe anymore determining the worlds fate. How will the poor peons survive without us.

I am an engineer and an Economist. The problem with their "models" is essentially they are LINEAR---in the mathematical sense--and the real world is some combination nonlinear, discontinuous, fractal feedback loop thingy. As long as the economy stays on a glide path , they trumpet "See how great our models are", but as soon as something changes, and their models completely miss the call, then they look to "adjust" the models!!

They actually have given Ph.d"s for over fifty years based on this crap. Amazing.

Some are linear, but many like cobb douglas, and Black Scholes are not. The larger problem is many if not most assume equal normal risk distributions or least squares regressions, and thus woefully underestimate tail risk.

You have to love these Keynesian guys. If reality flies in the face of their policies, they either say it's because they didn't do enough (Krugman) or they say it would have been worse without what they did (Meyer).

I wish I could be like them and never be wrong. They are like my wife.

Meyer goes onto say that Roach is wrong because he doesn't know what would've happened to the economy without monetary and fiscal stimulus...Yet goes onto say that even the Fed has no idea what would've happened without fiscal and monetary stimulus.

Further, he ADMITS that the Fed made "very bad forecasts." So if the Fed is continually WRONG with its forecasts...Why the fuck do we need the Fed and why the fuck are they the only ones making major decisions in monetary policy?

During World War II, [Nobel laureate, Ken] Arrow was assigned to a team of statisticians to produce long-range weather forecasts. After a time, Arrow and his team determined that their forecasts were not much better than pulling predictions out of a hat. They wrote their superiors, asking to be relieved of the duty. They received the following reply, and I quote "The Commanding General is well aware that the forecasts are no good. However, he needs them for planning purposes."

Larry Meyer has now succeded in justifying every wedgy I ever handed out. Clearly, not enough were handed out. This guy could have benefited from some more time spent locked up in his gym locker to reflect on why it is people don't want him involved with their lives.

I see an Ex Fedder scared to death that they might be audited...and found guilty...and lose their power and their job.....he made very little sense....but he was definatly defending the Fed....how they were trying..how they made mistakes...etc......he sees the end of his little kingdom ....and it scares him to death

finally sanity...nothing about our government private banking merger over the last 12 years can be correctly attributed to Keynesian economic theory in a free market however that sick fuck Milton Friedman who received a medal of freedom from Bush has his stink permeating this disaster.

Were Keynes here I am sure he would say that miss applying his life's work to an advanced economy with a Somalian regulatory regime is a waste of time.

Indeed, the uneducated here has just turned Keynes into the quintessential bogeyman, even though they have no idea as to anything about him, i.e., an incredibly astute investor. Intead, in this church of the uneducated, he has merely be turned into a symbol of every bad. Very silly folks, who, in the end, do harm to their own wealth (if they even have any).

Having said that, I add that I am completely against new huge doses of fiscal stimulus because the debt is too high, and I have no clue whether the money would just fall into the pockets of the favored constituencies instead of actually building anything. But, that does not mean that peopel should misunderstand or, worse, distort the arguments.

Indeed, the uneducated here has just turned Keynes into the quintessential bogeyman, even though they have no idea as to anything about him, i.e., an incredibly astute investor. Intead, in this church of the uneducated, he has merely be turned into a symbol of every bad. Very silly folks, who, in the end, do harm to their own wealth (if they even have any).

Having said that, I add that I am completely against new huge doses of fiscal stimulus because the debt is too high, and I have no clue whether the money would just fall into the pockets of the favored constituencies instead of actually building anything. But, that does not mean that peopel should misunderstand or, worse, distort the arguments.

I wish more people could see this to appreciate how clueless - but determined - the Fed is about their policies. So no matter how bad things get, Meyer can say, "Boy, you should see what would have happened if we didn't do what we did." So that's the guidance our monetary "leaders" are giving us to get out of this shit soup. Scary.

Larry Meyer is like a rat that's cornered. God help us if he's an example of the Federal Reserve and it's policy. He reminds one of William Dudley and his I-PAD comment. It goes to show you how out-of-touch these ivory-tower academics are.

William Dudley: "Today you can buy an iPad 2 that costs the same as an iPad 1 that is twice as powerful," he said."You have to look at the prices of all things."

Actually, had they stuck to their models and hit the iceberg head-on, likely only 1 or 2 compartments would have been breached and the ship would have stayed afloat, saving practically everyone. This proves that the economic models are more intelligent than the very people that come up with them, and that if we just stop questioning people with PhDs, everything will work out in the end.

My model, which actually involves getting in my fucking 12 year old car and buying $3.70 a gallon gasoline, includes going to the grocery store where most items have had 12-15% inflation over the past 2 years. I get some shrunken packaging items and stand in line behind 90% EBT card users to pay in cash for my items. I then stop at the local credit union to draw out some additional cash for mattress stuffing, foregoing that valuable .25 % interest. I then proceed towards my 40% devalued property and stop by JP Morgan Chase and piss on the side of their building. Finally home I turn on my computer and read about the economic recovery in place as I watch homeless people sleeping in the park. Must be outdoorsmen. I used to hang a flag on my porch but I can't find one that's not made in China anymore.

So Coca Cola are worried about the possibility of sales growth diminishing and they charge the head of Marketing with coming up with a strategy to achieve 5% sales growth over the next two years. He does it, with investment costs, expected outcomes and the consequent return on the investment. The new policiy is approved.

But what happens is that sales don´t go up ... you can bet he is getting his ears chewed off within months by the CEO who is watching "what is actually happening in the real world".

After a year of stagnant sales, he is eventually hauled in ..... "imagine how much sales would have gone down if it weren´t for my brilliant campaign" is his defence .....